Juniper Networks Merger Update

Investing.com – Juniper Networks Inc (NYSE:JNPR)'s stock may drop by approximately 5% if its merger with Hewlett Packard Enterprise (NYSE:HPE) fails, according to Citi analysts in a note on Tuesday.

Citi's caution comes after a Bloomberg report indicated that the U.S. Department of Justice (DOJ) might decide this week whether to challenge the merger.

Analysts at Citi project that Juniper's stock could decline to $33, based on its historical premium relative to competitor Cisco Systems (NASDAQ:CSCO) or a forward price-to-earnings ratio of 16.3 applied to Juniper's anticipated 2026 earnings.

Juniper shares closed at $35 on Tuesday.

There is growing speculation that the finalization of the merger may be postponed until January, hoping for a more favorable regulatory landscape with the upcoming Trump administration.

In January, HPE announced its $14 billion all-cash acquisition of the networking equipment manufacturer to enhance its AI offerings. HPE has proposed a price of $40 per share for Juniper stockholders.

The deal is expected to be funded through financing commitments for $14 billion in term loans and is anticipated to conclude in late 2024 or early 2025, pending regulatory approvals.

This acquisition aims to double HPE's networking business and coincides with increasing investments in AI-related infrastructure as the industry experiences significant growth.